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May 28, 2006
David Warsh, Proprietor

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That People are the Same and Different

A major challenge in the current age of globalization has to do with deciding how to think about what it is that is essentially the same among people around the world and what may be significantly different about them.

Will the Chinese, through superior industry, intelligence and sheer numbers, take over the global economy? Is, say, Indian society truly such that it can be understood only in its own terms? Are the Mexicans who migrate to the United States an inassimilable minority? Do Islamic fundamentalist values pose an insuperable threat to Western pluralism? What are the prospects for integrating sub-Saharan Africa into the world economy?

Not surprisingly, considerations like these were taken up energetically by many brilliant minds during the first great wave of globalization, in the nineteenth century.  The controversies thus engendered are traced out in an extremely interesting new book by Sandra J. Peart and David M. Levy, The “Vanity of the Philosopher:” from Equality to Hierarchy in Post-Classical Economics

Peart and Levy are professors of economics at Baldwin-Wallace College and George Mason University, respectively.  But they are clever and careful historians of ideas as well, who operate, along with many others, in the happy intellectual greenhouse that is the annual Summer Institute for the Preservation of the History of Economics. By giving us a good sense whence we’ve come, their book gives a glimpse of where we may be going next.

Their title comes from a passage in The Wealth of Nations in which Adam Smith asserts that the difference between the most dissimilar characters — between, for example, a philosopher and a common street porter — arises less from nature than from “habit, custom and education.” For their first six or eight years, any two youths are likely to remain pretty much alike, Smith writes.  But as they begin to go to work, they grow more and more different in their skills, “till at last the vanity of the philosopher is willing to acknowledge scarce any resemblance.”

In keeping with the spirit of the age of democratic revolutions, the classical economists presumed a high degree of equality among human beings. From Adam Smith to John Stuart Mill, the classicals rejected race and genetic endowment as factors that might determine the differences among nations, took for granted a certain human homogeneity with respect to the taste for commerce, and focused on the role of institutions instead. The classical system of “analytical homogeneity,” according to Peart and Levy, was one in which everyone counted equally and was presumed equally capable of making decisions about their own welfare.

No sooner had the nineteenth century begun, however, than systems of “analytical hierarchy,” emphasizing human heterogeneity, re-entered the debate in new and “scientific” forms. These inevitably argued that some groups were privileged over others, usually along lines of race or capability. Such doctrines dated back to Plato, the authors say; it was he who famously asked, Why it was we breed cattle but not people? The tacit presupposition of this question — that there must be philosophical experts who in their wisdom differ fundamentally from human “cattle: — would take many forms during the coming decades, the authors write.  In the mid-nineteenth century, it flared up first as a debate over slavery.

Peart and Levy trace the peculiar forms that racism took in England — the equation of the Irish and the Africans as inherently inferior races; the notion that to seek self-rule was to step out a natural chain of hierarchy and to “devolve” into a still lower position on the scale; the strange three-way alliance among the classical economists, evangelicals and Jews that led to the abolition of slavery. They describe the gradual transformation of the heterogeneity view, first into social Darwinism, then into eugenics movement, and the policies that flowed from it: immigration strictures, sterilization, and, eventually, mass murder. The postulate of hierarchy is “extraordinarily pliable,” the authors note: “‘Inferior’ becomes any group who is presently out of favor with the analyst.”

Meanwhile, they chronicle the war on “sympathy.”  For Adam Smith and his followers, the benefits from commercial and political exchange were not just monetary. A second, incommensurate good was involved as well — “approbation,” or respect, closely linked to the faculty of sympathy, which Smith explained as the capacity to imagine the experiences and opinions of others. But to the eugenicists, sympathy interfered with the efficient operation of mechanisms of natural selection, so it was to be supressed.  In this view, the Irish were sub-human — “careless, squalid, unaspiringÉ, fed on potatoes, living in a pig-sty, doting on a superstition, multiply[ing] like rabbits or ephemera,” in one eugenicist’s description. Sympathy for the sub-human Irish was misplaced.

It was in these circumstances that hierarchy entered mainstream economics, in the form of Francis Ysidro Edgeworth’s 1881 “Mathematical Psychics,” with a calculus designed for individuals who have differential capacities for happiness. The influences backward to Darwin and forward to Pareto become complicated and difficult to grasp without a quiet hour or two to spend. Eventually Edgeworth’s high-handed attempt to measure and compare levels of happiness among people came to naught; economists eventually gave up altogether the attempt to make interpersonal comparisons of welfare, the authors say — but not before a certain tendency to paternalism seeped into Anglo-American economics.

It was only in the second half of the twentieth century, Peart and Levy write, that classical doctrines gradually were reclaimed from “the vanity of the philosophers,” in the works of Friedrich Hayek, George Orwell, Milton Friedman and Ludwig von Mises and others. “As experiments in eugenics finally confronted the horror of the Holocaust, the classical tradition of equal competence (homogeneity) revived, at London, Chicago and scattered throughout the Austrian school.” But the Chicago school revival differed from classical liberalism in one significant respect, they note. Sympathy and reciprocity remained out of bounds.

Peart and Levy are perhaps a little optimistic about the capacity of the doctrine of equal competence to survive without modification in the twenty-first century. Previous attacks on consumer sovereignty were fought off handily enough — Maurice Dobb by Abba Lerner, John Kenneth Galbraith by Hayek. But much more powerful forces are being marshaled for an assault from within technical economics — the analysis of the effects of monopolistic competition, the insights of behavioral economics and evolutionary psychology, not to mention the discoveries of molecular biology. Cavalier assumptions about race and hierarchy are being supplanted by more narrowly-framed hypotheses about cognitive capacity.

There are differences among people, after all — between women and men, rich and poor, smart and strong, tall and short, healthy and handicapped. Those who wish to admit a little inequality into their calculations will opt for a more contemporary statement — for example, this formulation of the late Robert Nozick, who, building on Mill, wrote:  “What is desired is an organization of society optimal for people who are far less than ideal, optimal also for much better people, and which is such that living under such organization tends to make people better and more ideal.”

Others, including those who have been through the recent battles over the genetic predispositions of men and women with respect to science and mathematics, will prefer the strategy of Lionel Robbins, a distinguished English economist. This is the banner to which Peart and Levy themselves repair. It is as good a way as any to convey the mood of good sense and deep learning that pervades their book.  Robbins put it this way in 1938, on the eve of the several darkest years in modern times:

I have always felt that, as a first approximation in handling questions relating to the lives and actions of larges masses of people, the approach which counts one man as one, and, on that assumption, asks which way lies the greatest happiness, is less likely to lead one astray than any of the absolute systems. I do not believe, and I never have believed, that in fact men are necessarily equal or should always be judged as such.  But I do believe that, in most cases, political calculations which do not treat them as if they were equal are morally revolting.

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